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LPC Biennial Convention: Basic Income Supplement proposal

Posted by Scott Tribe on January 13, 2014, at 1:26 pm |

I figured with a month and a bit to go to the LPC Biennial Convention in Montreal, which will be crafting and formulating policy resolutions among other things (and which, assuming I’m accredited, I will be there covering it as a blogger) I’d start focusing on a few things and ideas that interest me and which I think should/could be a major topic leading up to the Convention. The Basic Income Supplement proposal will be the first one I look at.

A basic income supplement (BIS) is a direct way of dramatically reducing or eliminating poverty in Canada by ensuring that all Canadians have access to the financial resources they need to secure safe housing, food, and a reasonable standard of living. It would be administered through the federal income tax system.The idea is often referred to as a guaranteed annual income (GAI), a guaranteed minimum income, a negative income tax or simply as a basic income…

A basic income supplement is a logical next step for Canada to take, to ensure that all Canadians have that support. Canadians from many different political parties support the idea of a basic income supplement.

If you look through the articles below the above particular quote, you’ll see that folks like Conservative Senator Hugh Seagal supports this, and there are other articles both for and against and in between on the idea of the BIS.

The idea is currently being championed to get passed at the Biennial by Jesse Helmer, a Liberal blogger who’s taken a bit of a break from blogging, but who is quite active in the Party… and someone I can tell you from crossing paths (and swords) with him before that he isn’t one of those Liberals I’d place on the left side of the Party. However, this idea I think is one that many “progressive” Liberals could support, and one on which first blush I think I could support as well.

If you wish more information on the Basic Income Supplement idea, or how you might help get it passed at the Biennial, please email Jesse at his address for more info.

The experiment began in 1974. It was designed to test the concept of a guaranteed annual income in a small, fairly typical, community. Dauphin, a rural municipality of 13,000 midway between Winnipeg and Regina, was chosen at the behest of former Manitoba premier Ed Schreyer.

The city’s low-income residents were lifted and kept out of poverty, using a negative income tax. (Canada Revenue Agency topped up their income if it fell below the poverty line.) They could use the money as they chose.

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Here is what Forget’s research has already shown:

• During the GAI experiment, Dauphin had a dramatically lower rate of hospital admissions than similar communities in Manitoba.

• Its high-school dropout rate fell and stayed down for a generation.

• It had fewer accidents, serious injuries, arrests and convictions.

• Consultations for mental illness declined.

• And, contrary to policy-makers’ fears, people in Dauphin did not stop working or reduce their hours to get “free” money from the government.

“In all of the indicators I could find for quality of life, people did better,” Forget says.

But she can’t do a proper cost-benefit analysis. “Someone needs to estimate the savings associated with reduced bureaucracy, better education and health outcomes and probably lower costs associated with crime and special education,” she told The Uniter, a student newspaper at the University of Winnipeg.

“Politically, there was a concern that if you began a guaranteed annual income, people would stop working and start having large families,” says Dr. Forget, who presented her findings this year at the Institut national d’études démographiques in Paris. “But we found that, if anything, birth rates among the youngest women declined.”

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“I think people living with poverty are living with a great deal of stress.

In fact, stress is almost too mild a word for the kind of terror people live in while trying to care for their children and make good decisions for their children when they don’t have the capacity to enact those decisions.”

— Dr. Evelyn Forget

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“Once upon a time in Canada, there was a town where no one was poor.”

So begins a 2009 report by Dr. Evelyn Forget who assessed the effects on health of a guaranteed annual income for the town.

That might seem like a fairy tale, but it’s an historic fact. And an extraordinary episode in Canadian history. From 1974 through 1978, as part of a labour market experiment called MINCOME, all of the almost 13,000 citizens in and around Dauphin, Manitoba were guaranteed annual income support to keep them above the poverty line. Not everyone claimed MINCOME The federal government covered 75% of the costs and the Province of Manitoba under Premier Ed Schreyer, the rest.

But what if we gave poor Canadians something to count on: cash directly in their pockets, with no conditions, trusting people to do what’s right for them? It’s a bold idea, and it runs counter to the paternal approach to poverty that polices what is done with “our” money and tries to strong-arm the poor into better lives.

Let’s start with a hypothetical question. If you know that person A earned X dollars in 2013, what will person A’s income in 2014 be?

If you answered anything other than “I don’t know” to that question, then you’re buying into right-wing stereotypes about poverty. Unfortunately for conservatives, there are good statistics showing that these stereotypes don’t apply to the vast majority of people living in poverty.

If you did answer “I don’t know” to that question, then how on earth do you justify basing this kind of program on what people earned the year previously?

I do realize that GIS for seniors works this way, but the reason it works for seniors is that for most seniors, their income does stay relatively the same from year to year. (Hence the term “fixed income.”) However, this is not true of most non-seniors living in poverty. (Which is what my point about right-wing stereotypes was about.)

Canada does need to be doing a much better job of dealing with poverty. And many people find means tested programs more politically palatable than universal programs. Progressive people, though, must still avoid getting suckered into the argument that the tax system provides a reasonable way to do means testing.